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Case Title:
WIGBERTO E. TAADA and ANNA
DOMINIQUE COSETENG, as
members of the Philippine Senate 18 SUPREME COURT REPORTS ANNOTATED
and as taxpayers; GREGORIO Taada vs. Angara
ANDOLANA and JOKER ARROYO as
members of the House of *
G.R. No. 118295. May 2, 1997.
Representatives and as taxpayers;
NICANOR P. PERLAS and HORACIO
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as
R. MORALES, both as taxpayers;
members of the Philippine Senate and as taxpayers; GREGORIO
CIVIL LIBERTIES UNION, NATIONAL
ANDOLANA and JOKER ARROYO as members of the House of
ECONOMIC PROTECTIONISM Representatives and as taxpayers; NICANOR P. PERLAS and
ASSOCIATION, CENTER FOR HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES
ALTERNATIVE DEVELOPMENT UNION, NATIONAL ECONOMIC PROTECTIONISM
INITIATIVES, LIKAS-KAYANG ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT
KAUNLARAN FOUNDATION, INC., INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION,
PHILIPPINE RURAL INC., PHILIPPINE RURAL RECONSTRUCTION MOVEMENT,
RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG
DEMOKRATIKONG KILUSAN NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in
MAGBUBUKID NG PILIPINAS, INC., representation of various taxpayers and as non-governmental
and PHILIPPINE PEASANT organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO
INSTITUTE, in representation of ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ,
AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI
various taxpayers and as non-
governmental organizations,
petitioners, vs. EDGARDO ANGARA, ______________
ALBERTO ROMULO, LETICIA RAMOS-
* EN BANC.
SHAHANI, HEHERSON ALVAREZ,
AGAPITO AQUINO, RODOLFO 19
BIAZON, NEPTALI, GONZALES,
ERNESTO HERRERA, JOSE LINA,
VOL. 272, MAY 2, 1997 19
GLORIA MACAPAGAL-ARROYO,
ORLANDO MERCADO, BLAS OPLE, Taada vs. Angara
JOHN OSMEA, SANTANINA RASUL,
RAMON REVILLA, RAUL ROCO,
FRANCISCO TATAD and FREDDIE GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA
WEBB, in their respective capacities MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE,
JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL
as members of the Philippine Senate
ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their
who concurred in the ratification by
respective capacities as members of the Philippine Senate who
the President of the Philippines of the concurred in the ratification by the President of the Philippines of
Agreement Establishing the World the Agreement Establishing the World Trade Organization;
Trade Organization; SALVADOR SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and
ENRIQUEZ, in his capacity as Management; CARIDAD VALDEHUESA, in her capacity as
Secretary of Budget and National Treasurer; RIZALINO NAVARRO, in his capacity as
Management; CARIDAD Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his
VALDEHUESA, in her capacity as capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in
National Treasurer; RIZALINO his capacity as Secretary of Finance; ROBERTO ROMULO, in his
NAVARRO, in his capacity as capacity as Secretary of Foreign Affairs; and TEOFISTO T.
Secretary of Trade and Industry; GUINGONA, in his capacity as Executive Secretary, respondents.
ROBERTO SEBASTIAN, in his capacity
as Secretary of Agriculture; Constitutional Law; Judicial Review; Separation of Powers; Where an
ROBERTO DE OCAMPO, in his action of the legislative branch is seriously alleged to have infringed the
capacity as Secretary of Finance; Constitution, it becom es not only the right but in fact the duty of the
ROBERTO ROMULO, in his capacity judiciary to settle the dispute.In seeking to nullify an act of the
as Secretary of Foreign Affairs; and Philippine Senate on the ground that it contravenes the Constitution, the
petition no doubt rais es a justiciable controversy. Where an action of the
TEOFISTO T. GUINGONA, in his
legislative branch is seriously alleged to have infringed the Cons titution,
capacity as Executive Secretary,
it becomes not only the right but in fact the duty of the judiciary to settle
respondents.
Citation: 272 SCRA 18 the dispute. The question thus posed is judicial rather than political. The
More... duty (to adjudicate) remains to assure that the supremacy of the
Constitution is upheld. Once a controvers y as to the application or
interpretation of a constitutional provision is raised before this Court (as
Search Result in the instant case), it becomes a legal issue which the Court is bound by
constitutional mandate to decide.
Same; Same; Actions; Special Civil Actions; Certiorari, prohibition and
mandamus are appropriate remedies to raise constitutional issues and to
review and/or prohibit/nullify, when proper, acts of legislative and
executive officials.As the petition alleges grave abuse of discretion and as
there is no other pl ain, speedy or adequate remedy in the ordinary course
of law, we have no hesitation at all in holding that this petition should be
given due course and the
20
vital questions raised therein ruled upon under Rule 65 of the Rules of
Court. Indeed, certiorari, prohibition and mandamus are appropriate
remedies to raise constitutional issues and to review and/or
prohibit/nullify, when proper, acts of legislative and executive officials. On
this, we have no equivocation.
Same; Same; Same; Same; In deciding to take jurisdiction over this
petition, the Supreme Court does not review the wisdom of the decision of
the President and the Senate in enlisting the country in the WTO, or pass
upon the merits of trade liberalization as a policy espoused by said
international body, rather, it only exercises its constitutional duty to
determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the Senate in
ratifying the WTO Agreement and its three annexes.We should stres s
that, in deciding to take jurisdiction over this petition, this Court will not
review the wisdom of the decision of the President and the Senate in
enlisting the country into the WTO, or pass upon the m erits of trade
liberalization as a policy espoused by said international body. Neither will
it rule on the propriety of the governments economic policy of
reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and
other import/trade barriers. Rather, it will only exercise its constitutional
duty to determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the
Senate in ratifying the WTO Agreement and its three annexes.
Same; Constitutional Principles and State Policies; The principles and
state policies enumerated in Article II and some sections of Article XII are
not self-executing provisions, the disregard of which can give rise to a cause
of action in the courts.By its very title, Article II of the Constitution is a
declaration of principles and state policies. The counterpart of this
article in the 1935 Constitution is called the bas ic political creed of the
nation by Dean Vicente Sinco. These principles in Article II are not
intended to be self-executing principles ready for enforcement through the
courts. They are used by the judiciary as aids or as guides in the exercise
of its power of judicial review, and by the legislature in its enactment of
laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato,
the principles and state policies enumerated in Article II and some
sections of Article XII are not self-executing provis ions, the disregard of
which can give rise to a cause of action in the courts. They do not embody
judicially enforceable constitutional rights but guidelines for legislation.
21
that in joining the WTO, the respondents have gravely abused their
discretion. True, they have made a bold decision to steer the ship of state
into the yet uncharted sea of economic liberalization. But such decision
cannot be set aside on the ground of grave abuse of discretion, simply
because we disagree with it or simply because we believe only in other
economic policies. As earlier stated, the Court in taking jurisdiction of this
case will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only perform its constitutional
duty of determining whether the Senate committed grave abuse of
discretion.
Same; Same; Same; Same; Same; Same; The fundamental law
encourages industries that are competitive in both domestic and foreign
markets, thereby demonstrating a clear policy against a sheltered domestic
trade environment, but one in favor of the gradual developm ent of robust
industries that can compete with the best in the foreign markets.The
WTO reliance on most favored nation, national treatment, and trade
without discrimination cannot be struck down as unconstitutional as in
fact they are rules of equality and reciprocity that apply to all WTO
members. Aside from envisioning a trade policy based on equality and
reciprocity, the fundamental law encourages industries that are
competitive in both domestic and foreign markets, thereby
demonstrating a clear policy against a sheltered domestic trade
environment, but one in favor of the gradual development of robust
industries that can compete with the best in the foreign markets. Indeed,
Filipino managers and Filipino enterprises have shown capability and
tenacity to compete internationally. And given a free trade environment,
Filipino entrepreneurs and managers in Hongkong have demonstrated the
Filipino capacity to grow and to prosper against the best offered under a
policy of laissez faire.
Same; Same; Same; Same; Same; Same; Political Questions; The
responses to questions on whether WTO/GATT will favor the general
welfare of the public at large involve judgment calls by our policy makers,
for which they are answerable to our people during appropriate electoral
exercisessuch questions and the answers thereto are not subject to
judicial pronouncements based on grave abuse of discretion.
Consequently, the question boils down to whether WTO/GATT will favor
the general welfare of the public at large. Will adherence to the W TO
treaty bring this ideal (of favoring the general welfare) to reality? Will
WTO/GATT succeed in promoting the Filipinos general welfare because it
willas promised by its
23
PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade
Organization, abetted by the membership thereto of the vast
majority of countries, has revolutionized international business and
economic relations amongst states. It has irreversibly propelled the
world towards trade liberalization and economic globalization.
Liberalization, globalization, deregulation and privatization, the
third-millennium buzz words, are ushering in a new borderless
world of business by sweeping away as mere historical relics the
heretofore traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas, quantitative
restrictions, tax exemptions and currency controls. Finding market
niches and becoming the best in specific industries in a market-
driven and export-oriented global scenario are replacing age-old
beggar-thy-neighbor policies that unilaterally protect weak and
inefficient domestic producers of goods and services. In the words of
Peter Drucker, the well-known management guru, Increased
participation in the world economy has become the key to domestic
economic growth and prosperity.
Dumbarton Oaks and Bretton Woods. The first was the World Bank
(WB) which was to address the rehabilitation and reconstruction of
war-ravaged and later developing countries; the second, the
International Monetary Fund (IMF) which was to deal with
currency problems; and the third, the International Trade
Organization (ITO), which was to foster order and predictability in
world trade and to minimize unilateral protectionist policies that
invite challenge, even retaliation, from other states. However, for a
variety of reasons, including its non-ratification by the United
States, the ITO, unlike the IMF and WB, never took off. What
remained was only GATTthe General Agreement on Tariffs and
Trade. GATT was a collection of treaties governing access to the
economies of treaty adherents with no institutionalized body
administering the agreements or dependable system of dispute
settlement.
After half a century and several dizzying rounds of negotiations,
principally the Kennedy Round, the Tokyo Round and the Uruguay
Round, the world finally gave birth to that administering bodythe
World Trade Organizationwith the signing of the Final Act in
Marrakesh, Morocco
1
and the ratification of the WTO Agreement by
its members.
______________
Court on August 12, 1996, Philippine Ambassador to the United Nations , World
Trade Organization and other international organizations Lilia R. Bautista
(hereafter referred to as Bautista Paper) submitted a 46-year Chronology of
GATT as follows:
1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and Trade
(GATT) was signed by 23 nations at the Palais des Nations in Geneva. The Agreement
contained tariff concessions agreed to in the first multilateral trade negotiations and a set of
rules designed to prevent these concessions from being frustrated by restrictive trade
measures.
The 23 founding contracting parties were members of the Preparatory Committee
established by the United Nations Economic and Social Council in 1946 to draft the charter of
the International Trade Organization (ITO). The ITO was envis-
30
_______________
aged as the final leg of a triad of post-War economic agencies (the other two were the
International Monetary Fund and the International Bank for Reconstructionlater the
World Bank).
In parallel with this task, the Committee members decided to negotiate tariff conces sions
among themselves. From April to October 1947, the participants completed some 123
negotiations and established 20 schedules containing the tariff reductions and bindings
which became an integral part of GATT. These schedules resulting from the first Round
covered some 45,000 tariff concessions and about $10 billion in trade.
GATT was conceived as an interim measure that put into effect the commercial-policy
provisions of the ITO. In November, delegations from 56 countries met in Havana, Cuba, to
consider the ITO draft as a whole. After long and difficult negotiations, s ome 53 countries
signed the Final Act authenticating the text of the Havana Charter in March 1948. There
was no commitment, however, from governments to ratification and, in the end, the ITO was
stillborn, leaving GATT as the only international instrument governing the conduct of world
trade.
1948 Entry into force. On 1 January 1948, GATT entered into force. The 23 founding mem
bers were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba,
Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway,
Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States.
The firs t Session of the Contracting Parties was held from February to March in Havana,
Cuba. The secretariat of the Interim Commiss ion for the ITO, which served as the ad hoc
secretariat of GATT, moved from Lake Placid, New York, to Geneva. The Contracting Parties
held their second session in Geneva from August to September.
1949 Second Round at Annecy. During the second Round of trade negotiations, held from
April to August at Annecy, France, the contracting parties exchanged some 5,000 tariff
concess ions. At their third Session, they also dealt with the access ion of ten more countries.
31
_______________
1950 Third Round at Torquay. From September 1950 to April 1951, the contracting parties
exchanged some 8,700 tariff concessions in the English town, yielding tariff reduction of
about 25 per cent in relation to the 1948 level. Four more countries acceded to GATT. During
the fifth Session of the Contracting Parties, the United States indicated that the ITO Charter
would not be re-submitted to the US Congress; this, in effect, meant that ITO would not come
into operation.
1956 Fourth Round at Geneva. The fourth Round was completed in May and produced
some $2.5 billion worth of tariff reductions . At the beginning of the year, the GATT
commercial policy course for officials of developing countries was inaugurated.
1958 The Haberler Report. GATT published Trends in International Trade in October.
Known as the Haberler Report in honour of Professor Gottfried Haberler, the chairman of
the panel of eminent economists, it provided initial guidelines for the work of GATT. The
Contracting Parties at their 13th Session, attended by Ministers, subsequently established
32
_______________
1961 The Short-Term Arrangement covering cotton textiles was agreed as an exception to the
GATT rules. The arrangement permitted the negotiation of quota restrictions affecting the
exports of cotton-producing countries. In 1962 the Short Term Arrangement became the
Long term Arrangement, lasting until 1974 when the Multifibre Arrangement entered into
force.
1964 The Kennedy Round. Meeting at Ministerial level, a Trade Negotiations Committee
formally opened the Kennedy Round in May. In June 1967, the Rounds Final Act was signed
by some 50 participating countries which together accounted for 75 per cent of world trade.
For the first time, negotiations departed from the product-by-product approach used in the
previous Rounds to an across-the-board or linear method of cutting tariffs for industrial
goods. The working hypothesis of a 50 per cent target cut in tariff levels was achieved in
many areas. Concessions covered an estimated total value of trade of about $40 billion.
Separate agreements were reached on grains, chemical products and a Code on Anti-
Dumping.
1965 A New Chapter. The early 1960s marked the accession to the General Agreement of
many newly-independent developing countries. I n February, the Contracting Parties,
meeting in a special session, adopted the text of Part IV on Trade and Development. The
additional chapter to the GATT required developed countries to accord high priority to the
reduction of trade barriers to products of developing countries. A Committee on Trade and
Development was established to oversee the functioning of the new GATT provisions. In the
preceding year, GATT had established the International Trade Centre (ITC) to help
developing countries in trade promotion and identification of potential markets. Since 1968,
the ITC had been jointly operated by GATT and the UN Conference on Trade and
Development (UNCTAD). 1973 The Tokyo Round. The seventh Round was launched by
Ministers in September at the Japanese capital. Some 99 countries participated in
negotiating a comprehensive body of agreements covering both tariff and non-tariff matters.
33
(the attraction of) more investments into the country. Although the
Chief Executive did not expressly mention it in his
_______________
At the end of the Round in November 1979, participants exchanged tariff reductions and
bindings which covered more than $300 billion of trade. As a result of these cuts, the
weighted average tariff on manufactured goods in the worlds nine major industrial markets
declined from 7.0 to 4.7 per cent. Agreements were reached in the following areas: subsidies
and countervailing measures, technical barriers to trade, import licensing procedures,
government procurement, customs valuation, a revised anti-dumping code, trade in bovine
meat, trade in dairy products and trade in civil aircraft. The first concrete result of the Round
was the reduction of import duties and other trade barriers by industrial countries on tropical
products exported by developing countries.
1974 On 1 January 1974, the Arrangement Regarding International Trade in Textiles,
otherwise known as the Multi-fibre Arrangement (MFA), entered into force. I t superseded the
arrangements that had been governing trade in cotton textiles since 1961. The MFA seeks to
promote the expansion and progressive liberalization of trade in textile products while at the
same time avoiding disruptive effects in individual markets and lines of production. The MFA
was extended in 1978, 1982, 1986, 1991 and 1992. MFA members account for most of the
world exports of textiles and clothing which in 1986 amounted to US$128 billion.
1982 Ministerial Meeting. Meeting for the first time in nearly ten years, the GATT
Ministers in November at Geneva reaffirmed the validity of GATT rules for the conduct of
international trade and committed themselves to combating protectionist pressures. They
also established a wide-ranging work programme for the GATT which was to lay down the
groundwork for a new Round.
1986 The Uruguay Round. The GATT Trade Mi ni sters meeting at Punta del Este,
Uruguay, launched the eighth Round of trade negotiations on 20 September. The Punta del
Este Declaration, while representing a single political undertaking, was divided into two
sections. The first covered negotiations on trade in goods and the second initiated negotiation
on trade in s ervices. In the area of trade in goods, the Minis
34
Arguing mainly (1) that the WTO requires the Philippines to place
nationals and products of member-countries on the same footing as
Filipinos and local products and (2) that the WTO intrudes, limits
and/or impairs the constitutional powers of both Congress an d th e
Su preme Court, the instant petition before this Court assails the
WTO Agreement for
________________
ters committed themselves to a standstill on new trade measures inconsis tent with their
GATT obligations and to a rollback programme aimed at phasing out existing inconsistent
measures. Envisaged to last four years, negotiations started in early February 1987 in the
following areas: tariffs, non-tariff measures, tropical products, natural resource-based
products, textiles and clothing, agriculture, subsidies, safeguards, trade-related aspects of
intellectual property rights including trade in counterfeit goods, and trade-related
investment meas ures . The work of other groups included a review of GATT articles, the
GATT dispute-settlement procedure, the Tokyo Round agreements, as well as the functioning
of the GATT system as a whole.
1994 GATT 1994 is the updated version of GATT 1947 and takes into account the
substantive and institutional changes negotiated in the Uruguay Round. GATT 1994 is an
integral part of the World Trade Organization established on 1 January 1995. It is agreed
that there be a one year transition period during which certain GATT 1947 bodies and
commitments would co-exist with those of the World Trade Organization.
35
The Facts
_______________
2 The Final Act was signed by repres entatives of 125 entities, namely Algeria,
_______________
Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cameroon,
Canada, Central African Republic, Chad, Chile, Peoples Republic of China, Colombia, Congo,
Costa Rica, Republic of Cote dIvoire, Cuba, Cyprus, Czech Republic, Kingdom of Denmark,
Commonwealth of Dominica, Dominican Republic, Arab Republic of Egypt, El Salvador,
European Communities, Republic of Fiji, Finland, French Republic, Gabonese Republic,
Gambia, Federal Republic of Germany, Ghana, Hellenic Republic, Grenada, Guatemala,
Republic of Guinea-Bissau, Republic of Guyana, Haiti, Honduras, Hongkong, Hungary,
Iceland, India, Indonesia, Ireland, State of Israel, Italian Republic, Jamaica, Japan, Kenya,
Korea, State of Kuwait, Kingdom of Lesotho, Principality of Liechtenstein, Grand Duchy of
Luxembourg, Macau, Republic of Madagascar, Republic of Malawi, Malaysia, Republic of
Maldives, Republic of Mali, Republic of Malta, Islamic Republic of Mauritania, Republic of
Mauritius, United Mexican States, Kingdom of Morocco, Republic of Mozambique, Union of
Myanmar, Republic of Namibia, Kingdom of the Netherlands, New Zealand, Nicaragua,
Republic of Niger, Federal Republic of Nigeria, Kingdom of Norway, Islamic Republic of
Pakistan, Paraguay, Peru, Philippines, Poland, Portuguese Republic, State of Qatar,
Romania, Rwandese Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the
Grenadines, Senegal, Sierra Leone, Singapore, Slovak Republic, South Africa, Kingdom of
Spain, Democratic Socialist Republic of Sri Lanka, Republic of Surinam, Kingdom of
Swaziland, Kingdom of Sweden, Swiss Confederation, United Republic of Tanzania, Kingdom
of Thailand, Togolese Republic, Republic of Trinidad and Tobago, Tunisia, Turkey, Uganda,
United Arab Emirates, United Kingdom of Great Britain and Northern I reland, United
States of America, Eastern Republic of Uruguay, Venezuela, Republic of Zaire, Republic of
Zambia, Republic of Zimbabwe; see pp. 6-25, Vol. 1, Uruguay Round of Multilateral Trade
Negotiations.
37
3
the Philippines, stating among others that the Uruguay Round
Final Act is hereby submitted to the Senate for its
________________
3
11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated copy of the Uruguay
Round Final Act signed by Department of Trade and Industry Secretary
Rizalino S. Navarro for the Philippines on 15 April 1994 in Marrakesh,
Morocco.
The Uruguay Round Final Act aims to liberalize and expand world trade
and strengthen the interrelationship between trade and economic policies
affecting growth and development.
The Final Act will improve Philippine access to foreign markets, especially
its major trading partners through the reduction of tariffs on its exports
particularly agricultural and industrial products. These concessions may be
availed of by the Philippines, only if it is a member of the World Trade
Organization. By GATT estimates, the Philippines can acquire additional
export revenues from $2.2 to $2.7 Billion annually under Uruguay Round. This
will be on top of the normal increase in exports that the Philippines may
experience.
The Final Act will also open up new opportunities for the services sector in
such areas as the movement of personnel, (e.g., professional services and
construction services), cross-border supply (e.g., computer-related services),
consumption abroad (e.g., tourism, convention services, etc.) and commercial
presence.
The clarified and improved rules and disciplines on anti-dumping and
countervailing measures will also benefit Philippine exporters by reducing the
costs and uncertainty associated with exporting while at the same time
providing a means for domestic industries to safeguard themselves against
unfair imports.
Likewise, the provision of adequate protection for intellectual property
rights is expected to attract more inves tments into the country and to make it
less vulnerable to unilateral actions by its trading partners (e.g., Sec. 301 of
the United States Omnibus Trade Law).
38
_______________
In view of the foregoing, the Uruguay Round Final Act is hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VI I of the Constitution.
A draft of a proposed Resolution giving its concurrence to the afores aid
Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
4
11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated copy of the Uruguay
Round Final Act signed by Department of Trade and Industry Secretary
Rizalino S. Navarro for the Philippines on 13 April 1994 in Marrakech (sic),
Morocco.
Members of the trade negotiations committee, which included the
Philippines, agreed that the Agreement Establishing the World Trade
Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services embody the results of
their negotiations and form an integral part of the Uruguay Round Final Act.
By signing the Uruguay Round Final Act, the Philippines, through Secretary
Navarro, agreed:
39
likewise dated August 11, 1994, which stated among others that
the Uruguay Round Final Act, the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and
Decisions, and the Understanding on Commitments in Financial
Services are hereby submitted to the Sen-
______________
The Final Act will improve Philippine access to foreign markets, especially its
major trading 0partners through the reduction of tariffs on its exports particularly
agricultural and industrial products. These concessions may be availed of by the
Philippines, only if it is a member of the World Trade Organization. By GATT
estimates, the Philippines can acquire additional export revenues from $2.2. to
$2.7 Billion annually under Uruguay Round. This will be on top of the normal
increase in the exports that the Philippines may experience.
The Final Act will also open up new opportunities for the services sector in such
areas as the movement of personnel, (e.g., professional services and construction
services), cross-border supply (e.g., computer-related services), consumption abroad
(e.g., tourism, convention services, etc.) and commercial presence.
The clarified and improved rules and disciplines on anti-dumping and
countervailing measures will also benefit Philippine exporters by reducing the
costs and uncertainty associated with exporting while at the same time providing a
means for domestic industries to safeguard themselves against unfair imports.
Likewise, the provision of adequate protection for intellectual property rights is
expected to attract more inves tments into the country and to make it less
vulnerable to unilateral actions by its trading partners (e.g., Sec. 301 of the United
States Omnibus Trade Law).
In view of the foregoing, the Uruguay Round Final Act, the Agreement
Establishing the World Trade Organization, the Ministerial Declarations and
Decisions, and the Understanding on Commitments in Financial Services, as
embodied in the Uruguay Round Final Act and forming an integral part thereof are
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article
VII of the Constitution.
A draft of a proposed Resolution giving its concurrence to the aforesaid
Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
40
ate for its concurrence pursuant to Section 21, Article VII of the
Constitution.
On December 9, 1994, the President of the Philippines certified
the necessity of the immediate adoption of P.S. 1083, a resolution
entitled Concurring in the Ratification5 of the Agreement
Establishing the World Trade O rganization.
On December 14, 1994, the Philippine Senate adopted Resolution
No. 97 which Resolved, as it is hereby resolved, that the Senate
concur, as it hereby concurs, in the ratification by the President of
the Philippines6
of the Agreement Establishing the World Trade
Organization. The text of the WTO Agreement is written on pages
137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements
and associated legal
_______________
December 9, 1994
HON. EDGARDO J. ANGARA
Senate President
Senate, Manila
Dear Senate President Angara:
Pursuant to the provis ions of Sec. 26(2), Article VI of the Constitution, I
hereby certify to the necessity of the immediate adoption of P.S. 1083, entitled:
assailed Senate Resolution No. 97. It was prepared by the Committee of the Whole
on the General Agreement on Tariffs and Trade chaired by Sen. Blas F. Ople and
co-chaired by Sen. Gloria Macapagal-Arroyo; see Annex C, Compliance of
petitioners dated January 28, 1997.
41
ANNEX 2
ANNEX 3
_______________
which as of July 26, 1996 had 123 members as follows: Antigua and Barbuda,
Argentina, Australia, Austria, Bahrain, Bangladesh, Barbados, Belguim, Belize,
Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi,
Camer
42
oon, Canada, Central African Republic, Chili, Colombia, Costa Rica, Cote
dIvoire, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican
Republic, Ecuador, Egypt, El Salvador, European Community, Fiji, Finland,
France, Gabon, Germany, Ghana, Greece, Grenada, Guatemala, Guinea, Guinea
Bissau, Guyana, Haiti, Honduras, Hongkong, Hungary, Iceland, India, Indonesia,
Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Kuwait, Lesotho,
Liechtenstein, Luxembourg, Macau, Madagascar, Malawi, Malaysia, Maldives,
Mali, Malta, Mauritania, Mauritius, Mexico, Morocco, Mozambique, Myanmar,
Namibia, Netherlandsfor the Kingdom in Europe and for the Netherlands
Antilles, New Zealand, Nicaragua, Nigeria, Norway, Pakistan, Papua New Guinea,
Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Romania, Rwanda, Saint
Kitts and Nevis , Saint Lucia, Saint Vincent & the Grenadines, Senegal, Si erra
Leone, Si ngapore, Sl ovak Republ ic, Sl oveni a, Solomon Islands, South Africa,
Spain, Sri Lanka, Surinam, Swaziland, Sweden, Switzerland, Tanzania, Thailand,
Togo, Trinidad and Tobago, Tunisia, Turkey, Uganda, United Arab Emirates,
United Kingdom, United States, Uruguay, Venezuela, Zambia and Zimbabwe. See
Annex A, Bautista Paper, infra.
43
8
dated May 13, 1996, the Solicitor General describes these two
latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five declarations
and decisions on a wide range of matters, such as measures in favor of
least developed countries, notification procedures, relationship of WTO
with the International Monetary Fund (I MF), and agreements on
technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on,
among other things, standstill or limitations and qualifications of
commitments to existing non-conforming measures, market access,
national treatment, and definitions of non-resident supplier of financial
services, commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful
deliberation on respondents comment and petitioners reply thereto,
the Court resolved on December 12, 1995, to give due course to the
petition, and the parties thereafter filed their respective
memoranda. The Court also requested the Honorable Lilia R.
Bautista, the Philippine Ambassador to the United Nations
stationed in Geneva, Switzerland,9 to submit a paper, hereafter
referred to as Bautista Paper, for brevity, (1) providing a
historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court
directed:
(a) the petitioners to submit the (1) Senate Committee Report on the
matter in controversy and (2) the transcript of proceedings/hearings
in the Senate; and
(b) the Solicitor General, as cou n s el for res ponden ts , to file (1) a list
of Philippine treaties signed prior to the Philippine adher
______________
44
The Issues
By raising and arguing only four issues against the seven presented
by petitioners, the Solicitor General has effectively ignored three,
namely: (1) whether the petition presents a political question or is
otherwise not justiciable; (2) whether petitioner-members of the
Senate (Wigberto E. Taada and Anna Dominique Coseteng) are
estopped from joining this
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During its deliberations on the case, the Court noted that the
respondents did not question the locus standi of petitioners. Hence,
they are also deemed to have waived the benefit of such issue. They
probably realized that grave constitutional issues, expenditures of
public funds and serious international commitments of the nation
are involved here, and that transcendental public interest requires
that the substantive issues be met head on and decided on 11
the
merits, rather than skirted or deflected by procedural matters.
To recapitulate, the issues that will be ruled upon shortly are:
______________
11 Cf. Kilosbayan, Incorporated vs. Morato, 246 SCRA 540, July 17, 1995 for a
discussion on locus standi. See also the Concurring Opinion of Mr. Justice Vicente
V. Mendoza in Tatad vs. Garcia, Jr., 243 SCRA 473, April 6, 1995, as well as
Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239 SCRA 386, 414, December 23,
1994.
47
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12 Aquino, Jr. vs. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974, cited in
Bondoc vs. Pineda, 201 SCRA 792, 795, September 26, 1991.
48
________________
13 Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993.
14 See Tanada and Macapagal vs. Cuenco, et al., 103 Phil. 1051 for a discussion
on the scope of political question.
15 Section 1, Article VIII, (par. 2).
Tyrant? Senator Arturo Tolentino concedes that this new provision gives the
Supreme Court a duty to intrude into the jurisdiction of the Congress or the
President.
17 I Record of the Constitutional Commission 436.
18 Cf. Daza vs. Singson, 180 SCRA 496, December 21, 1989.
49
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of
the Constitution mandating economic nationalism are violated by
the so-called parity provisions and national treatment clauses
scattered in various parts not only of the WTO Agreement and its
annexes but also in the Ministerial Decisions and Declarations and
in the Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to
are Sec. 19, Article II, and Secs. 10 and 12, Article XII, of the
Constitution, which are worded as follows:
50
Article II
DECLARATION OF PRINCIPLES
AND STATE POLICI ES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos.
xx xx xx xx
Article XII
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will encourage
the formation and operation of enterprises whose capital is wholly owned
by Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified
Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods, and adopt measures that
help make them competitive.
Article 2
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ANNEX
Illustrative List
52
The products of the territory of any contracting party imported into the territory of
any other contracting party shall be accorded treatment no less favourable than
that accorded to like products of national origin in respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase,
transportation, distribution or use. The provisions of this paragraph shall not
prevent the application of differential internal transportation charges which are
based exclusively on the economic operation of the means of transport and not on
the nationality of the product. (Article III , GATT 1947, as amended by the
Protocol Modifying Part II, and Article XXVI of GATT, 14 September 1948, 62
UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs and
Trade 1994, Vol. 1, Uruguay Round, Legal Instruments, p. 177, emphasis supplied).
Each Mem ber shall accord to the nationals of other Members treatment no less
favourable than what it accords to its own nationals with regard to the protection
of intellectual property . . . (par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property Rights, Vol. 31, Uruguay Round, Legal Instruments, p.
25432, emphasis supplied).
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and service
suppliers of any other Member, in res pect of all measures affecting the supply of
services, treatment no less favourable than it accords to its own like services and
service suppliers.
53
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_______________
_______________
Section 1. x x x
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and
to determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of juris diction on the part of any branch or instrumentality of the
Government. (Emphases supplied)
As pointed out by the Solicitor General, Sec. 1 lays down the basic
goals of national economic development, as follows:
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say that in joining the WTO, the respondents have gravely abused
their discretion. True, they have made a bold decision to steer the
ship of state into the yet uncharted sea of economic liberalization.
But such decision cannot be set aside on the ground of grave abuse
of discretion, simply because we disagree with it or simply because
we believe only in other economic policies. As earlier stated, the
Court in taking jurisdiction of this case will not pass upon the
advantages and disadvantages of trade liberalization as an
economic policy. It will only perform its constitutional duty of
determining whether the Senate committed grave abuse of
discretion.
_______________
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38 Justice Isagani A. Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own
article entitled, A Quintessential Constitution earlier published in the San Beda Law
Journal, April 1972; Italics supplied.
65
tional Convention, nor can it conjure by mere fiat an ins tant Utopia. It
must grow with the society it seeks to re-structure and march apace with
the progress of the race, drawing from the vicissitudes of history the
dynamism and vitality that will keep it, far from becoming a petrified rule,
a pulsing, living law attuned to the heartbeat of the nation.
The WTO Agreement provides that (e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures39
with its obligations as provided in the annexed Agreements.
Petitioner s maintain that this undertaking unduly limits, restricts
and impairs Philippine sovereignty, specifically the legislative
power which under Sec. 2, Article VI of the 1987 Philippine
Constitution is vested in the Congress of the Philippines. It is an
assault on the sovereign powers of the Philippines because this
means that Congress could not pass legislation that will be good for
our national interest and general welfare if such legislation will not
conform with the WTO Agreement, which not only relates to the
trade in goods x x x but also to the flow of investments and money x
x x as well as40 to a whole slew of agreements on socio-cultural
matters x x x .
More specifically, petitioners claim that said WTO proviso41
derogates from the power to tax, which is lodged in the Congress.
And while the Constitution allows Congress to authorize the
President to fix tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts, such authority is
subject to specified limits and x 42x x such limitations and
restrictions as Congress may provide, as in fact it did under Sec.
401 of the Tariff and Customs Code.
_______________
Sovereignty Limited by
International Law and Treaties
This Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-
encompassing on the domestic level, it is however subject to
restrictions and limitations voluntarily agreed to by the
Philippines, expressly or impliedly, as a member of the family of
nations. Unquestionably, the Constitution did not envision a
hermit-type isolation of the country from the rest of the world. In its
Declaration of Principles and State Policies, the Constitution
adopts the generally accepted principles of international law as
part of the law of the land, and adheres to the policy of peace,
equality, 43 justice, freedom, cooperation and am ity, w ith all
nations. By the doctrine of incorporation, the country is bound by
generally accepted principles of international law,44 which are
considered to be automatically part of our own laws. One of the
oldest and most fundamental rules in international law is pacta
sunt servandainternational agreements must be performed in
good faith. A treaty engagement is not a mere moral obligation but
creates a legally binding obligation on the parties x x x. A state
which has contracted valid international obligations is bound to
make in its legislations such modifications as may be 45
necessary to
ensure the fulfillment of the obligations undertaken.
By their inherent nature, treaties really limit or restrict the
absoluteness of sovereignty. By their voluntary act, nations may
surrender some aspects of their state power in exchange for greater
benefits granted by or derived from a convention or pact. After all,
states, like individuals, live w ith coequals, and in pursuit of
mutually covenanted objectives and benefits, they also commonly
agree to limit the exercise of their other-
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27, 1969.
68
69
(b) Bilateral agreement with Belgium, providing, among others, for the
avoidance of double taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance
of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of
double taxation.
(e) Bilateral air transport agreement with Korea where the
Philippines agreed to exempt from all customs duties, inspection
fees and other duties or taxes aircrafts of South Korea and the
regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines
agreed to exempt from customs duties, excise taxes, inspection fees
and other similar duties, taxes or charges fuel, lubricating oils,
spare parts, regular equipment, stores on board Japanese aircrafts
while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines
granted Belgian air carriers the same privileges as those granted to
Japanese and Korean air carriers under separate air service
agreements.
(h) Bilateral notes with Israel for the abolition of transit and vis itor
visas where the Philippines exempted Israeli nationals from the
requirement of obtaining transit or visitor visas for a sojourn in the
Philippines not exceeding 59 days.
(i) Bilateral agreement with France exempting French nationals from
the requirement of obtaining transit and visitor visa for a sojourn
not exceeding 59 days.
(j) Multilateral Convention on Special Missions , where the
Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premis
es without consent of the Head of Mission concerned. Special
Missions are also exempted from cus toms duties, taxes and related
charges.
(k) Multilateral Convention on the Law of Treaties. In this convention,
the Philippines agreed to be governed by the Vienna Convention on
the Law of Treaties.
(l) Declaration of the President of the Philippines accepting com puls
ory jurisdiction of the International Court of Jus tice. The
International Court of Justice has jurisdiction in all legal disputes
concerning the interpretation of a treaty, any question of interna
70
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________________
enumerated what constitutes the Final Act should have been the
subject of concurrence of the Senate.
A final act, sometimes called protocol de clture, is an
instrument which records the winding up of the proceedings of a
diplomatic conference and usually includes a reproduction of the
texts of treaties, conventions, recommendations and other acts
agreed upon54 and signed by the plenipotentiaries attending the
conference. It is not the treaty itself. It is rather a summary of the
proceedings of a protracted conference which may have taken place
over several years. The text of the Final Act Embodying the
Results of the Uruguay Round 55
of Multilateral Trade Negotiations
is contained in just one page in Vol. I of the 36-volum e Uruguay
Round of Multilat-
______________
(a) to subm it, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
_______________
pants) with a view to its entry into force by 1 January 1995, or as early as
possible thereafter. Not later than late 1994, Ministers will meet, in accordance
with the final paragraph of the Punta del Este Ministerial Declarations, to decide
on the international implementation of the results, including the timing of their
entry into force.
4. The representatives agree that the WTO Agreem ent shall be open for
acceptance as a whole, by signature or otherwise, by all participants
pursuant to Article XIV thereof. The acceptance and entry into force of a
Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement
shall be governed by the provisions of that Plurilateral Trade Agreement.
5. Before accepting the WTO Agreement, participants which are not
contracting parties to the General Agreement on Tariffs and Trade must
first have concluded negotiations for their acces sion to the General
Agreement and become contracting parties thereto. For participants which
are not contracting parties to the General Agreement as of the date of the
Final Act, the Schedules are not definitive and shall be subsequently
completed for the purpose of their accession to the General Agreement and
acceptance of the WTO Agreement.
6. This Final Act and the texts annexed hereto shall be deposited with the
Director-General to the CONTRACTING PARTIES to the General Agreem
ent on Tariffs and Trade who shall promptly furnish to each participant a
certified copy thereof. DONE at Marrakesh this fifteenth day of April one
thousand nine hundred and ninety-four, in a single copy, in the English,
French and Spanish languages, each text being authentic.
76
1. The WTO shall provide the common institutional framework for the
conduct of trade relations among its Members in matters to the
agreements and associated legal instruments included in the
Annexes to this Agreement.
2. The Agreements and associated legal instruments included in
Annexes 1, 2, and 3 (hereinafter referred to as Multilateral
Agreements) are integral parts of this Agreement, binding on all
Members.
3. The Agreements and associated legal instruments included in
Annex 4 (hereinafter referred to as Plurilateral Trade
Agreements) are also part of this Agreement for those Members
that have accepted them, and are binding on those Members. The
Plurilateral
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Can this Comm ittee hear from Senator Taada and later on
Senator Tolentino since they were the ones that raised this
question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly
appear that what is being submitted to the Senate for ratification
is not the Final Act of the Uruguay Round, but rather the
Agreement on the World Trade Organization as well as the
Ministerial Declarations and Decisions, and the Understanding
and Comm itm ents in Financial Services.
I am now satisfied with the wording of the new submission of
President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from
Senator Tolentino? And after him Senator Neptali Gonzales and
Senator Lina.
SEN. TOLENTI NO. MR. Chairman, I have not seen the new
submission actually transmitted to us but I saw the draft of his
earlier, and I think it now complies with the provisions of the
Constitution, and with the Final Act itself. The Constitution does
not require us to ratify the Final Act. It requires us to ratify the
Agreement which is now being submitted. The Final Act itself
specifies what is going to be submitted to with the governments of
the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as
appropriate the WTO Agreement for the consideration of the respective
competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures.
Epilogue
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63
abuse of discretion will result in the dismissal of the petition.
In rendering this D ecision, this Court never forgets that the
Senate, whose act is under review, is one of two sovereign houses of
Congress and is thus entitled to great respect in its actions. It is
itself a constitutional body independent and coordinate, and thus its
actions are presumed regular and done in good faith. Unless
convincing proof and persuasive arguments are presented to
overthrow such presumptions, this Court will resolve every doubt in
its favor. Using the foregoing well-accepted definition of grave abuse
of discretion and the presumption of regularity in the Senates
processes, this Court cannot find any cogent reason to impute grave
abuse of discretion to the Senates exercise of its power of
concurrence in the WTO 64
Agreement granted it by Sec. 21 of Article
VII of the Constitution.
It is true, as alleged by petitioners, that broad constitutional
principles require the State to develop an independent national
economy effectively controlled by Filipinos; and to protect and/or
prefer Filipino labor, products, dom estic materials and locally
produced goods. But it is equally true that such principleswhile
serving as judicial and legislative guidesare not in themselves
sources of causes of action. Moreover, there are other equally
fundamental constitutional principles relied upon by the Senate
which mandate the pursuit of a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity and the promotion of industries w
hich are competitive in both domestic and foreign markets, thereby
justifying its acceptance of said treaty. So too, the alleged
impairment of sovereignty in the exercise of legisla-
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81
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82
Petition dismissed.
83